Dave Ramsey High School Course – What to Consider When Filing My Taxes Online

Is e-filing really a better way to file your taxes? 

Americans and the IRS might not agree on everything, but they’re largely on the exact same page when it comes to e-filing individual income tax returns.

Nearly all individual income tax returns filed to the IRS are e-filed.  E-filing is popular as it’s a win-win for taxpayers and the IRS.

In return, you could find any refund you are owed faster, particularly if you have it directly deposited into your bank accounts.

But what about security?  And can electronic filing really give you access to all of the forms you may need in case you have a complex tax situation?  Are there situations when you can’t e-file?  Let’s look at the advantages of e-filing, and whether it might be the best filing option for your requirements.

If you are Considering e-filing, a Few of the advantages include:

  1. Quick confirmation your forms are obtained: The IRS will affirm a tax filing was received within 24 hours of electronic submission.  For paper filers, the IRS does not send any acknowledgment your forms have arrived safely. 
  2. Timely refunds: When you publish a paper filing, it may take six to eight weeks to be given a tax refund.  With e-filing, you are going to get your money in three weeks or less.  Choosing direct deposit may also accelerate the refund procedure.

  3. Reduced likelihood of mistakes: According to the IRS, there is approximately a 1% error rate on e-filed returns, compared with a 20% rate of mistakes on paper filings.  The IRS also provides more information on issues discovered on e-filed yields compared with paper returns.

  4. Easy payment procedure: If you owe the IRS money, it’s simpler to pay at your advantage if you e-file.  It’s possible to submit returns early and pay later if necessary, provided that you pay from the April 15 filing deadline.  And you’re able to schedule electronic funds transfers to send the IRS what you owe on a date of your choosing — again, provided that the IRS receives your payment by Tax Day. You also have the option to pay your balance by using the IRS Direct pay service from your checking account or savings accounts, filing a credit card through a payment processor for a fee, or paying by check or money order. 

  5. Digital storage of tax information: Submitting returns electronically means there is a digital copy of your tax records.  So if something happens to your paperwork, then you’ll have a digital backup.

The fantastic news: Most taxpayers do opt to e-file and find those benefits — and the practice of doing so is easy.

How to e-file a tax return?

  • Free File Fillable Forms — If your income is more than $72,000 and you’re comfortable doing your taxes without assistance, you can use Free File Fillable Forms from the IRS. The types do the math for you and offer standard guidance.  You can only do your federal return with all these forms. 
  • Use an internet tax preparation service or tax software: Tax prep software and online filing services are alternatives.  These choices are an easy way to complete and e-file your own forms.  Some software suppliers charge for their programs, Some are free.   The software asks you simple questions about your own life and financing to steer you through the completion of your forms.  
  • Get free, in-person tax help: In most states, you can find volunteers to help prepare and e-file returns.  However, eligibility for free help is normally restricted based on income, and some services appeal to particular demographic groups.  By way of instance, Tax Counseling for the Elderly programs focus primarily on helping filers that are 60 and older.  The IRS maintains a database of authorized providers, but you should be aware this option is likely to be the most costly one. 
  • Using online tax prep software is far and away the favored approach of the majority of taxpayers.  In fact, the IRS says it expected over four in five tax returns to be filed through tax return prep software.

    Is e-filing really secure?

    While e-filing is suitable, you may worry about safety — particularly with all these data breaches.  But experts agree that this isn’t an issue that should deter you by e-filing.

    “E-filing a tax return has proven to be a very secure way to file your taxes,” says Scott Grissom, vice president of product direction, advertising and sales at LegalShield. “In fact, it may be more secure than paper filing as you’re sending your personal information through an encrypted system rather than exposing your data in the email.”

    Dennis Chow, vice president of information security at SCIS Security, clarifies that the IRS has set safety measures in place to keep your data secure.  “Vendors typically utilize IRS specific APIs that require token sessions,” Chow says.  “All of this can be routed over TLS encrypted links .”

    It is very important to use a trusted service that will assist you record your taxes.  Chow advises to not e-file on a computer or use an online connection that is not confidential.

    Bottom line

    For many taxpayers, it makes sense to e-file a yield since it is the most convenient way to submit your tax information to the IRS and it allows for timely refunds and effortless payment choices.  Just make certain that you use tax preparation software from a trusted source, so you may make certain the information you provide to transmit to the IRS is going to be kept secure.